LORD ABBETT SEMIANNUAL REPORT Lord Abbett Series Fund International Core Equity Portfolio For the six-month period ended June 30, 2017
Table of Contents 1 A Letter to Shareholders 2 Information About Your Fund s Expenses and Holdings Presented by Sector 4 Schedule of Investments 10 Statement of Assets and Liabilities 11 Statement of Operations 12 Statements of Changes in Net Assets 14 Financial Highlights 16 Notes to Financial Statements 24 Supplemental Information to Shareholders
Lord Abbett Series Fund International Core Equity Portfolio Semiannual Report For the six-month period ended June 30, 2017 From left to right: James L.L. Tullis, Independent Chairman of the Lord Abbett Funds and Daria L. Foster Director, President, and Chief Executive Officer of the Lord Abbett Funds. Dear Shareholders: We are pleased to provide you with this semiannual report of Lord Abbett Series Fund International Core Equity Portfolio for the sixmonth period ended June 30, 2017. For additional information about the Fund, please visit our website at www.lordabbett.com, where you can access the quarterly commentaries by the Fund s portfolio managers. General information about Lord Abbett mutual funds, as well as in-depth discussions of market trends and investment strategies, is also provided in Lord Abbett Insights, a quarterly newsletter available on our website. Thank you for investing in Lord Abbett mutual funds. We value the trust that you place in us and look forward to serving your investment needs in the years to come. Best regards, Daria L. Foster Director, President and Chief Executive Officer 1
Expense Example As a shareholder of the Fund, you incur ongoing costs, including management fees; expenses related to the Fund s services arrangements with certain insurance companies; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2017 through June 30, 2017). The Example reflects only expenses that are deducted from the assets of the Fund. Fees and expenses, including sales charges applicable to the various insurance products that invest in the Fund, are not reflected in this Example. If such fees and expenses were reflected in the Example, the total expenses shown would be higher. Fees and expenses regarding such variable insurance products are separately described in the prospectus related to those products. Actual Expenses The first line of the table on the following page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading titled Expenses Paid During Period 1/1/17 6/30/17 to estimate the expenses you paid on your account during this period. Hypothetical Example for Comparison Purposes The second line of the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. 2
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. Beginning Ending Expenses Account Account Paid During Value Value Period 1/1/17-1/1/17 6/30/17 6/30/17 Class VC Actual $1,000.00 $1,113.90 $4.56 Hypothetical (5% Return Before Expenses) $1,000.00 $1,020.48 $4.36 Net expenses are equal to the Fund s annualized expense ratio of 0.87%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect one- half year period). Portfolio Holdings Presented by Sector June 30, 2017 Sector* %** Consumer Discretionary 10.15% Consumer Staples 9.25% Energy 5.44% Financials 25.52% Health Care 10.31% Industrials 14.56% Information Technology 6.59% Materials 4.87% Real Estate 3.04% Telecommunication Services 4.70% Utilities 4.38% Repurchase Agreement 1.19% Total 100.00% * A sector may comprise several industries. ** Represents percent of total investments. 3
Schedule of Investments (unaudited) June 30, 2017 U.S. $ Fair Value Investments Shares (000) LONG- TERM INVESTMENTS 98.00% COMMON STOCKS 97.97% Australia 2.49% Airlines 0.68% Qantas Airways Ltd. 97,251 $ 428 Equity Real Estate Investment Trusts 1.81% Mirvac Group 691,130 1,131 Total Australia 1,559 Austria 1.23% Banks Erste Group Bank AG* 20,156 772 Brazil 2.28% Electric: Utilities 0.59% EDP- Energias do Brasil SA 86,500 371 Food Products 0.95% Minerva SA 159,942 594 Health Care Providers & Services 0.74% Qualicorp SA 53,200 461 Total Brazil 1,426 Canada 0.43% Oil, Gas & Consumable Fuels Seven Generations Energy Ltd. Class A* 15,800 271 China 1.40% Construction & Engineering 0.43% China Railway Group Ltd. H Shares 341,958 269 Oil, Gas & Consumable Fuels 0.97% China Petroleum & Chemical Corp. H Shares 780,000 609 Total China 878 U.S. $ Fair Value Investments Shares (000) Denmark 1.82% Banks 1.09% Danske Bank A/S 17,766 $ 683 Diversified Telecommunication Services 0.73% TDC A/S 77,788 453 Total Denmark 1,136 Finland 0.46% Paper & Forest Products UPM- Kymmene OYJ 10,033 286 France 12.05% Auto Components 1.50% Valeo SA 13,908 937 Automobiles 0.51% Renault SA 3,515 318 Banks 3.36% BNP Paribas SA 17,003 1,225 Societe Generale SA 16,347 879 2,104 Construction & Engineering 1.35% Vinci SA 9,876 843 Diversified Telecommunication Services 0.46% Orange SA 18,127 288 Information Technology Services 0.99% Atos SE 4,442 624 Machinery 0.44% Alstom SA* 7,852 274 Oil, Gas & Consumable Fuels 1.61% Total SA 20,361 1,007 Pharmaceuticals 0.67% Sanofi 4,360 417 4 See Notes to Financial Statements.
Schedule of Investments (unaudited)(continued) June 30, 2017 U.S. $ Fair Value Investments Shares (000) Textiles, Apparel & Luxury Goods 1.16% LVMH Moet Hennessy Louis Vuitton SE 2,905 $ 724 Total France 7,536 Germany 9.06% Hotels, Restaurants & Leisure 0.89% TUI AG 38,373 559 Industrial Conglomerates 1.69% Siemens AG Registered Shares 7,697 1,058 Insurance 2.17% Allianz SE Registered Shares 6,887 1,356 U.S. $ Fair Value Investments Shares (000) Commercial Banks 1.08% Allied Irish Banks plc 119,100 $ 673 Total Ireland 1,624 Italy 5.59% Banks 1.83% UniCredit SpA* 61,341 1,145 Diversified Telecommunication Services 1.66% Telecom Italia SpA* 1,123,000 1,036 Electric: Utilities 2.10% Enel SpA 245,208 1,315 Total Italy 3,496 Life Sciences Tools & Services 0.84% MorphoSys AG* 7,444 528 Multi- Utilities 1.65% RWE AG* 51,751 1,031 Pharmaceuticals 1.82% Bayer AG Registered Shares 8,786 1,136 Total Germany 5,668 Hong Kong 2.49% Industrial Conglomerates 1.28% Jardine Strategic Holdings Ltd. 10,381 433 Shanghai Industrial Holdings Ltd. 123,000 364 797 Real Estate Management & Development 1.21% Hysan Development Co., Ltd. 159,000 758 Total Hong Kong 1,555 India 0.76% Banks ICICI Bank Ltd. ADR 53,161 477 Ireland 2.60% Banks 1.52% Bank of Ireland* 3,618,141 951 Japan 17.58% Automobiles 0.89% Honda Motor Co., Ltd. 20,500 558 Banks 1.96% Mitsubishi UFJ Financial Group, Inc. 182,223 1,223 Chemicals 3.53% Asahi Kasei Corp. 35,335 379 Mitsubishi Chemical Holdings Corp. 129,500 1,071 Mitsubishi Gas Chemical Co., Inc. 29,900 631 Teijin Ltd. 6,500 125 2,206 Construction & Engineering 1.08% Obayashi Corp. 28,800 338 Taisei Corp. 37,000 338 676 Distributors 0.67% PALTAC Corp. 12,500 421 Diversified Financial Services 1.04% ORIX Corp. 42,000 650 See Notes to Financial Statements. 5
Schedule of Investments (unaudited)(continued) June 30, 2017 U.S. $ Fair Value Investments Shares (000) Household Durables 0.60% Sony Corp. 9,800 $ 373 Insurance 1.45% T&D Holdings, Inc. 59,800 909 Machinery 2.34% Komatsu Ltd. 20,400 518 Makino Milling Machine Co., Ltd. 48,000 395 NTN Corp. 120,000 553 1,466 Road & Rail 0.91% Central Japan Railway Co. 3,500 570 Software 1.30% Nintendo Co., Ltd. 2,427 813 Trading Companies & Distributors 0.85% Mitsubishi Corp. 25,230 528 Wireless Telecommunication Services 0.96% SoftBank Group Corp. 7,426 601 Total Japan 10,994 Macau 0.70% Hotels, Restaurants & Leisure Wynn Macau Ltd. 188,400 440 Netherlands 7.90% Air Freight & Logistics 0.85% PostNL NV 113,708 531 Banks 1.98% ING Groep NV 71,711 1,237 Food & Staples Retailing 0.86% Koninklijke Ahold Delhaize NV 28,141 538 Industrial Conglomerates 1.21% Koninklijke Philips NV 21,385 759 Insurance 1.65% ASR Nederland NV 17,169 579 6 See Notes to Financial Statements. U.S. $ Fair Value Investments Shares (000) NN Group NV 12,712 $ 452 1,031 Oil, Gas & Consumable Fuels 1.35% Royal Dutch Shell plc B Shares 31,479 846 Total Netherlands 4,942 New Zealand 0.71% Health Care Providers & Services Metlifecare Ltd. 112,332 442 Norway 1.11% Commercial Banks 0.26% Sparebank 1 Oestlandet* 17,266 163 Metals & Mining 0.85% Norsk Hydro ASA 95,301 528 Total Norway 691 Singapore 0.78% Food Products Wilmar International Ltd. 199,900 486 South Korea 2.91% Diversified Telecommunication Services 0.86% KT Corp. ADR 32,167 535 Food & Staples Retailing 0.52% E- MART, Inc. 1,586 325 Technology Hardware, Storage & Peripherals 1.53% Samsung Electronics Co., Ltd. 462 960 Total South Korea 1,820 Spain 3.03% Banks 1.22% Banco Bilbao Vizcaya Argentaria SA 92,356 766 Construction & Engineering 0.81% Sacyr SA* 190,251 504
Schedule of Investments (unaudited)(continued) June 30, 2017 U.S. $ Fair Value Investments Shares (000) Oil, Gas & Consumable Fuels 1.00% Repsol SA 40,744 $ 624 Total Spain 1,894 Sweden 0.53% Machinery Volvo AB B Shares 19,280 329 Switzerland 7.14% Food Products 2.60% Nestle SA Registered Shares 18,688 1,627 Insurance 1.17% Swiss Life Holding AG Registered Shares* 2,173 733 Pharmaceuticals 3.37% Roche Holding AG 8,277 2,108 Total Switzerland 4,468 Taiwan 2.70% Electronic Equipment, Instruments & Components 1.82% Hon Hai Precision Industry Co., Ltd. 295,935 1,138 U.S. $ Fair Value Investments Shares (000) Hotels, Restaurants & Leisure 1.59% Compass Group plc 47,300 $ 998 Personal Products 1.04% Unilever NV CVA 11,749 648 Tobacco 1.78% British American Tobacco plc 16,310 1,112 Total United Kingdom 5,090 United States 2.08% Biotechnology Shire plc 23,596 1,302 Total Common Stocks (cost $55,671,168) 61,273 RIGHTS 0.03% Spain Oil, Gas & Consumable Fuels Repsol SA (a) (cost $19,432) 40,744 19 Total Investments in Long-Term 98.00% (cost $55,690,600) 61,292 Semiconductors & Semiconductor Equipment 0.88% Advanced Semiconductor Engineering, Inc. 430,682 553 Total Taiwan 1,691 United Kingdom 8.14% Auto Components 1.55% GKN plc 227,955 968 Banks 1.53% Royal Bank of Scotland Group plc* 296,489 955 Beverages 0.65% Coca- Cola European Partners plc 10,083 409 See Notes to Financial Statements. 7
Schedule of Investments (unaudited)(continued) June 30, 2017 Principal U.S. $ Amount Fair Value Investments (000) (000) SHORT- TERM INVESTMENT 1.18% Repurchase Agreement Repurchase Agreement dated 6/30/2017, 0.12% due 7/3/2017 with Fixed Income Clearing Corp. collateralized by $760,000 of U.S. Treasury Note at 1.375% due 8/31/2020; value: $758,687; proceeds: $739,256 (cost $739,249) $739 $ 739 Total Investments in Securities 99.18% (cost $56,429,849) 62,031 Foreign Cash and Other Assets in Excess of Liabilities 0.82% 515 Net Assets 100.00% $62,546 ADR American Depositary Receipt. CVA Company Voluntary Arrangement * Non- income producing security. (a) Strike price of $0 and expiration date of 7/6/2017. 8 See Notes to Financial Statements.
Schedule of Investments (unaudited)(concluded) June 30, 2017 The following is a summary of the inputs used as of June 30, 2017 in valuing the Fund s investments carried at fair value (1) : Level 1 Level 2 Level 3 Total Investment Type (2)(3) (000) (000) (000) (000) Common Stocks $61,273 $ $ $61,273 Right 19 19 Repurchase Agreement 739 739 Total $61,292 $739 $ $62,031 (1) Refer to Note 2(i) for a description of fair value measurements and the three- tier hierarchy of inputs. (2) See Schedule of Investments for fair values in each industry and identification of foreign issuers and/or geography. The table above is presented by Investment Type. Industries are presented within an Investment Type should such Investment Type include securities classified as two or more levels within the three- tier fair value hierarchy. (3) There were no Level 1/Level 2 transfers during the period ended June 30, 2017. See Notes to Financial Statements. 9
Statement of Assets and Liabilities (unaudited) June 30, 2017 ASSETS: Investments in securities, at fair value (cost $56,429,849) $62,031,098 Foreign cash, at value (cost $415,479) 413,239 Receivables: Dividends 178,334 Investment securities sold 174,339 From advisor (See Note 3) 25,290 Total assets 62,822,300 LIABILITIES: Payables: Investment securities purchased 95,720 Capital shares reacquired 51,434 Management fee 38,928 Directors fees 4,625 Fund administration 2,076 Accrued expenses 83,888 Total liabilities 276,671 NET ASSETS $62,545,629 COMPOSITION OF NET ASSETS: Paid- in capital $63,404,546 Undistributed net investment income 787,992 Accumulated net realized loss on investments and foreign currency related transactions (7,248,790) Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 5,601,881 Net Assets $62,545,629 Outstanding shares (50 million shares of common stock authorized, $.001 par value) 3,805,462 Net asset value, offering and redemption price per share (Net assets divided by outstanding shares) $16.44 10 See Notes to Financial Statements.
Statement of Operations (unaudited) For the Six Months Ended June 30, 2017 Investment income: Dividends (net of foreign withholding taxes of $135,696) $1,106,843 Interest 53 Total investment income 1,106,896 Expenses: Management fee 229,977 Non 12b-1 service fees 76,706 Shareholder servicing 33,029 Professional 27,337 Custody 20,706 Fund administration 12,266 Reports to shareholders 10,379 Directors fees 752 Other 4,618 Gross expenses 415,770 Expense reductions (See Note 8) (245) Fees waived and expenses reimbursed (See Note 3) (148,752) Net expenses 266,773 Net investment income 840,123 Net realized and unrealized gain (loss): Net realized gain on investments 1,717,407 Net realized loss on foreign currency related transactions (5,829) Net change in unrealized appreciation/depreciation on investments 4,090,722 Net change in unrealized appreciation/depreciation on translation of assets and liabilities denominated in foreign currencies 5,359 Net realized and unrealized gain 5,807,659 Net Increase in Net Assets Resulting From Operations $6,647,782 See Notes to Financial Statements. 11
Statements of Changes in Net Assets For the Six Months Ended June 30, 2017 For the Year Ended INCREASE (DECREASE) IN NET ASSETS (unaudited) December 31, 2016 Operations: Net investment income $ 840,123 $ 1,416,990 Net realized gain (loss) on investments and foreign currency related transactions 1,711,578 (4,234,373) Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies 4,096,081 1,851,263 Net increase (decrease) in net assets resulting from operations 6,647,782 (966,120) Distributions to shareholders from: Net investment income (1,555,460) Total distributions to shareholders (1,555,460) Capital share transactions (See Note 13) Proceeds from sales of shares 971,117 3,545,976 Reinvestment of distributions 1,555,460 Cost of shares reacquired (4,102,373) (3,775,290) Net increase (decrease) in net assets resulting from capital share transactions (3,131,256) 1,326,146 Net increase (decrease) in net assets 3,516,526 (1,195,434) NET ASSETS: Beginning of period $59,029,103 $60,224,537 End of period $62,545,629 $59,029,103 Undistributed (distributions in excess of) net investment income $ 787,992 $ (52,131) 12 See Notes to Financial Statements.
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Financial Highlights Per Share Operating Performance: Distributions to Investment operations: shareholders from: Total Net from Net asset Net realized investvalue, invest- and ment Net Net Return beginning ment unrealized opera- investment realized of of period income (a) gain (loss) tions income gain capital 6/30/2017 (c) $14.75 $0.21 $ 1.48 $ 1.69 $ $ $ 12/31/2016 15.42 0.36 (0.63) (0.27) (0.40) 12/31/2015 15.95 0.30 (0.59) (0.29) (0.23) (0.01) 12/31/2014 18.38 0.26 (1.99) (1.73) (0.18) (0.52) 12/31/2013 15.31 0.22 3.32 3.54 (0.24) (0.23) 12/31/2012 13.48 0.29 1.75 2.04 (0.21) (a) Calculated using average shares outstanding during the period. (b) Total return does not consider the effects of sales charges or other expenses imposed by an insurance company and assumes the reinvestment of all distributions. (c) Unaudited. (d) Not annualized. 14 See Notes to Financial Statements.
Ratios to Average Net Assets: Supplemental Data: Total expenses Net after Net asset waivers Net assets, Portfolio Total value, Total and/or reim- Total investment end of turnover distri- end of return (b) bursements expenses income period rate butions period (%) (%) (%) (%) (000) (%) $ $16.44 11.39 (d) 0.43 (d) 0.67 (d) 1.36 (d) $62,546 71.82 (d) (0.40) 14.75 (1.74) 0.87 1.39 2.43 59,029 190.31 (0.24) 15.42 (1.78) 0.87 1.43 1.84 60,225 59.93 (0.70) 15.95 (9.47) 0.87 1.59 1.49 52,629 57.80 (0.47) 18.38 23.16 0.87 2.02 1.31 31,923 56.36 (0.21) 15.31 15.13 0.87 3.81 2.03 9,945 78.47 See Notes to Financial Statements. 15
Notes to Financial Statements (unaudited) 1. ORGANIZATION Lord Abbett Series Fund, Inc. (the Company ) is registered under the Investment Company Act of 1940, as amended ( the Act ), as a diversified, open- end management investment company and was incorporated under Maryland law in 1989. The Company consists of twelve separate portfolios. This report covers International Core Equity Portfolio (the Fund ). The Fund s investment objective is to seek long- term capital appreciation. The Fund has Variable Contract class shares ( Class VC Shares ), which are currently issued and redeemed only in connection with investments in, and payments under, variable annuity contracts and variable life insurance policies issued by life insurance and insurance- related companies. The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America ( U.S. GAAP ) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. 2. SIGNIFICANT ACCOUNTING POLICIES (a) Investment Valuation Under procedures approved by the Fund s Board of Directors (the Board ), Lord, Abbett & Co. LLC ( Lord Abbett ), the Fund s investment manager, has formed a Pricing Committee to administer the pricing and valuation of portfolio investments and to ensure that prices utilized reasonably reflect fair value. Among other things, these procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value. Securities actively traded on any recognized U.S. or non- U.S. exchange or on The NASDAQ Stock Market LLC are valued at the last sale price or official closing price on the exchange or system on which they are principally traded. Events occurring after the close of trading on non- U.S. exchanges may result in adjustments to the valuation of foreign securities to reflect their fair value as of the close of regular trading on the New York Stock Exchange. The Fund may utilize an independent fair valuation service in adjusting the valuations of foreign securities. Unlisted equity securities are valued at the last quoted sale price or, if no sale price is available, at the mean between the most recently quoted bid and asked prices. Securities for which prices are not readily available are valued at fair value as determined by the Pricing Committee. The Pricing Committee considers a number of factors, including observable and unobservable inputs, when arriving at fair value. The Pricing Committee may use related or comparable assets or liabilities, recent transactions, market multiples, book values and other relevant information to determine the fair value of portfolio investments. The Board or a designated committee thereof regularly reviews fair value determinations made by the Pricing Committee and employs techniques such as reviewing related market activity, reviewing inputs and assumptions, and retrospectively comparing prices of subsequent purchases and sales transactions to fair value determinations made by the Pricing Committee. Short- term securities with 60 days or less remaining to maturity are valued using the amortized cost method, which approximates fair value. 16
Notes to Financial Statements (unaudited)(continued) (b) Security Transactions Security transactions are recorded as of the date that the securities are purchased or sold (trade date). Realized gains and losses on sales of portfolio securities are calculated using the identified- cost method. (c) Investment Income Dividend income is recorded on the ex- dividend date. Interest income is recorded on the accrual basis as earned. Discounts are accreted and premiums are amortized using the effective interest method and are included in Interest and other income on the Statement of Operations. Withholding taxes on foreign dividends have been provided for in accordance with the applicable country s tax rules and rates. (d) Income Taxes It is the policy of the Fund to meet the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all taxable income and capital gains to its shareholders. Therefore, no income tax provision is required. The Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Fund s filed U.S. federal tax returns remains open for the fiscal years ended December 31, 2013 through December 31, 2016. The statutes of limitations on the Company s state and local tax returns may remain open for an additional year depending upon the jurisdiction. (e) Expenses Expenses incurred by the Company that do not specifically relate to an individual fund are generally allocated to the funds within the Company on a pro rata basis by relative net assets. (f) Foreign Transactions The books and records of the Fund are maintained in U.S. dollars and transactions denominated in foreign currencies are recorded in the Fund s records at the rate prevailing when earned or recorded. Asset and liability accounts that are denominated in foreign currencies are adjusted daily to reflect current exchange rates and any unrealized gain (loss) is included in Net change in unrealized appreciation/depreciation on translation of assets and liabilities denominated in foreign currencies in the Fund s Statement of Operations. The resultant exchange gains and losses upon settlement of such transactions are included in Net realized loss on foreign currency related transactions in the Fund s Statement of Operations. The Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the changes in market prices of the securities. The Fund uses foreign currency exchange contracts to facilitate transactions in foreigndenominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts terms. (g) Forward Foreign Currency Exchange Contracts The Fund may enter into forward foreign currency exchange contracts in order to reduce their exposure to changes in foreign currency exchange rates on their foreign portfolio holdings, or gain or reduce exposure to foreign currency solely for investment purposes. A forward foreign currency exchange contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate. The contracts are valued daily at forward exchange rates and any unrealized gain (loss) is included in Net change in unrealized appreciation/depreciation on translation of assets and liabilities denominated in foreign currencies in the Fund s Statement of Operations. The gain (loss) arising from the difference between the U.S. dollar cost of the original contract and the value of the foreign currency in U.S. dollars upon closing of such contracts is included in Net realized loss on foreign currency related transactions in the Fund s Statement of Operations. 17
Notes to Financial Statements (unaudited)(continued) (h) Repurchase Agreements The Fund may enter into repurchase agreements with respect to securities. A repurchase agreement is a transaction in which a fund acquires a security and simultaneously commits to resell that security to the seller (a bank or securities dealer) at an agreed- upon price on an agreed- upon date. The Fund requires at all times that the repurchase agreement be collateralized by cash, or by securities of the U.S. Government, its agencies, its instrumentalities, or U.S. Government sponsored enterprises having a value equal to, or in excess of, the value of the repurchase agreement (including accrued interest). If the seller of the agreement defaults on its obligation to repurchase the underlying securities at a time when the fair value of these securities has declined, the Fund may incur a loss upon disposition of the securities. (i) Fair Value Measurements Fair value is defined as the price that the Fund would receive upon selling an investment or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. A threetier hierarchy is used to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk for example, the risk inherent in a particular valuation technique used to measure fair value (such as a pricing model) and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability. Observable inputs are based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity s own assumptions about the assumptions market participants would use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The three- tier hierarchy classification is determined based on the lowest level of inputs that is significant to the fair value measurement, and is summarized in the three broad Levels listed below: Level 1 unadjusted quoted prices in active markets for identical investments; Level 2 other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.); and Level 3 significant unobservable inputs (including the Fund s own assumptions in determining the fair value of investments). A summary of inputs used in valuing the Fund s investments as of June 30, 2017 and, if applicable, Level 1/Level 2 transfers and Level 3 rollforwards for the six months then ended is included in the Fund s Schedule of Investments. Changes in valuation techniques may result in transfers into or out of an assigned level within the three- tier hierarchy. All transfers between different levels within the three- tier hierarchy are deemed to have occurred as of the beginning of the reporting period. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. 18
Notes to Financial Statements (unaudited)(continued) 3. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES Management Fee The Company has a management agreement with Lord Abbett, pursuant to which Lord Abbett supplies the Fund with investment management services and executive and other personnel, provides office space and pays for ordinary and necessary office and clerical expenses relating to research and statistical work and supervision of the Fund s investment portfolio. The management fee is based on the Fund s average daily net assets at the following annual rate: First $1 billion.75% Next $1 billion.70% Over $2 billion.65% For the six months ended June 30, 2017, the effective management fee, net of waivers, was at an annualized rate of.26% of the Fund s average daily net assets. In addition, Lord Abbett provides certain administrative services to the Fund pursuant to an Administrative Services Agreement in return for a fee at an annual rate of.04% of the Fund s average daily net assets. For the six months ended June 30, 2017 and continuing through April 30, 2018, Lord Abbett has contractually agreed to waive its fees and reimburse expenses to the extent necessary to limit total net annual operating expenses to an annual rate of.87%. This agreement may be terminated only upon the approval of the Board. The Company, on behalf of the Fund, has entered into services arrangements with certain insurance companies. Under these arrangements, certain insurance companies will be compensated up to.25% of the average daily net asset value ( NAV ) of the Fund s Class VC Shares held in the insurance company s separate account to service and maintain the Variable Contract owners accounts. This amount is included in Non 12b-1 service fees on the Statement of Operations. The Fund may also compensate certain insurance companies, third- party administrators and other entities for providing recordkeeping, sub- transfer agency and other administrative services to the Fund. This amount is included in Shareholder servicing on the Statement of Operations. Two Directors and certain of the Company s officers have an interest in Lord Abbett. 4. DISTRIBUTIONS AND CAPITAL LOSS CARRYFORWARDS Dividends from net investment income, if any, are declared and paid at least semi- annually. Taxable net realized gains from investment transactions, reduced by allowable capital loss carryforwards, if any, are declared and distributed to shareholders at least annually. The capital loss carryforward amount, if any, is available to offset future net capital gains. Dividends and distributions to shareholders are recorded on the ex- dividend date. The amounts of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. These book/tax differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the components of net assets based on their federal tax basis treatment; temporary differences do not require reclassification. Dividends and distributions that exceed earnings and profits for tax purposes are reported as a tax return of capital. 19
Notes to Financial Statements (unaudited)(continued) The tax character of distributions paid during the six months ended June 30, 2017 and fiscal year ended December 31, 2016 was as follows: Six Months Ended 6/30/2017 Year Ended (unaudited) 12/31/2016 Distributions paid from: Ordinary income $ $1,555,460 Total distributions paid $ $1,555,460 As of December 31, 2016, the Fund had a capital loss carryforward of $8,417,878, which will carry forward indefinitely. As of June 30, 2017, the aggregate unrealized security gains and losses based on cost for U.S. federal income tax purposes were as follows: Tax cost $57,011,458 Gross unrealized gain 5,591,880 Gross unrealized loss (572,240) Net unrealized security gain $ 5,019,640 The difference between book- basis and tax- basis unrealized gains (losses) is attributable to the tax treatment of certain foreign securities and wash sales. 5. PORTFOLIO SECURITIES TRANSACTIONS Purchases and sales of investment securities (excluding short- term investments) for the six months ended June 30, 2017 were as follows: Purchases Sales $43,351,313 $45,682,079 There were no purchases or sales of U.S. Government securities for the six months ended June 30, 2017. The Fund is permitted to purchase and sell securities ( cross- trade ) from and to other Lord Abbett funds or client accounts pursuant to procedures approved by the Board in compliance with Rule 17a-7 under the Act (the Rule ). Each cross- trade is executed at a fair market price in compliance with provisions of the Rule. For the period ended June 30, 2017, the Fund engaged in cross- trades purchases of $86,074 and sales of $131,156, which resulted in net realized gains of $16,407. 6. DISCLOSURES ABOUT OFFSETTING ASSETS AND LIABILITIES The Financial Accounting Standards Board ( FASB ) requires disclosures intended to help better assess the effect or potential effect of offsetting arrangements on a fund s financial position. The following tables illustrate gross and net information about recognized assets and liabilities eligible for offset in the statement of assets and liabilities; and disclose such amounts subject to an enforceable master netting agreement or similar agreement, by counterparty. A master netting agreement is an agreement between a fund and a counterparty which provides for the net settlement of amounts owed under all contracts traded under that agreement, as well as cash collateral, through a single payment by one party to the other in the event of default on or termination of any one contract. The Fund s accounting policy with respect to balance sheet offsetting is that, absent an event of default by the counterparty or a termination of the agreement, the master netting agreement does not result in an offset of reported amounts of 20
Notes to Financial Statements (unaudited)(continued) financial assets and liabilities in the statement of assets and liabilities across transactions between the Fund and the applicable counterparty: Gross Amounts Net Amounts of Offset in the Assets Presented Gross Amounts of Statement of Assets in the Statement of Description Recognized Assets and Liabilities Assets and Liabilities Repurchase Agreement $739,249 $ $739,249 Total $739,249 $ $739,249 Net Amounts of Assets Amounts Not Offset in the Presented in Statement of Assets and Liabilities the Statement Cash Securities of Assets and Financial Collateral Collateral Net Counterparty Liabilities Instruments Received (a) Received (a) Amount (b) Fixed Income Clearing Corp. $739,249 $ $ $(739,249) $ Total $739,249 $ $ $(739,249) $ (a) Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statement of Assets and Liabilities, for each respective counterparty. (b) Net amount represents the amount owed to the Fund by the counterparty as of June 30, 2017. 7. DIRECTORS REMUNERATION The Company s officers and two Directors, who are associated with Lord Abbett, do not receive any compensation from the Company for serving in such capacities. Independent Directors fees are allocated among all Lord Abbett- sponsored funds based on the net assets of each fund. There is an equity- based plan available to all Independent Directors under which Independent Directors must defer receipt of a portion of, and may elect to defer receipt of an additional portion of Directors fees. The deferred amounts are treated as though equivalent dollar amounts had been invested in the funds. Such amounts and earnings accrued thereon are included in Directors fees on the Statement of Operations and in Directors fees payable on the Statement of Assets and Liabilities and are not deductible for U.S. federal income tax purposes until such amounts are paid. 8. EXPENSE REDUCTIONS The Company has entered into an arrangement with its transfer agent and custodian, whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund s expenses. 9. LINE OF CREDIT The Fund and certain other funds managed by Lord Abbett (collectively, the Participating Funds ) entered into a syndicated line of credit facility with various lenders for $550 million (the Facility ), whereas State Street Bank and Trust Company ( SSB ) participates as a lender and as agent for the lenders. The Facility is to be used for temporary or emergency purposes as an additional source of liquidity to satisfy redemptions. The Participating Funds are subject to graduated borrowing limits of one- third of Fund assets (if Fund assets are less than $750 million), $250 million, $300 million, or $350 million, based on past borrowings and likelihood of future borrowings. The Facility will continue through August 28, 2017. During the six months ended June 30, 2017, the Fund did not utilize the Facility. 21
Notes to Financial Statements (unaudited)(continued) 10. INTERFUND LENDING PROGRAM Pursuant to an exemptive order issued by the U.S. Securities and Exchange Commission ( SEC exemptive order ), certain registered open- end management investment companies managed by Lord Abbett, including the Fund, participate in a joint lending and borrowing program (the Interfund Lending Program ). The SEC exemptive order allows the Fund to borrow money from and lend money to each other for temporary or emergency purposes subject to the limitations and conditions. During the six months ended June 30, 2017, the Fund did not participate as a borrower or lender in the Interfund Lending Program. 11. CUSTODIAN AND ACCOUNTING AGENT SSB is the Company s custodian and accounting agent. SSB performs custodial, accounting and recordkeeping functions relating to portfolio transactions and calculating the Fund s NAV. 12. INVESTMENT RISKS The Fund is subject to the general risks and considerations associated with equity investing. The value of an investment will fluctuate in response to movements in the equity securities markets in general and to the changing prospects of individual companies in which the Fund invests. Large company value stocks, in which the Fund invests, may perform differently than the market as a whole and other types of stocks, such as small company stocks and growth stocks. The Fund is subject to the risks of investing in foreign securities and derivatives. Foreign securities may pose greater risks than domestic securities, including greater price fluctuations and higher transaction costs. Foreign investments also may be affected by changes in currency rates or currency controls. These risks are generally greater for securities issued by companies in emerging market countries. The Fund is also subject to the risks associated with derivatives, which may be different from and greater than the risks associated with investing directly in securities and other investments. The Fund is also subject to risk from redemptions by large shareholders, cyber security and other risks in connection with the operations of the Fund s service providers, and risks from market disruptions and geopolitical events. These factors can affect the Fund s performance. 13. SUMMARY OF CAPITAL TRANSACTIONS Transactions in shares of capital stock were as follows: Six Months Ended June 30, 2017 Year Ended (unaudited) December 31, 2016 Shares sold 63,180 241,082 Reinvestment of distributions 105,670 Shares reacquired (258,491) (250,444) Increase (decrease) (195,311) 96,308 22
Notes to Financial Statements (unaudited)(concluded) 14. RECENT ACCOUNTING REGULATION In October 2016, the U.S. Securities and Exchange Commission (the SEC ) adopted amendments to Regulation S-X that, along with other regulatory changes, are intended to modernize the reporting and disclosure of information by registered investment companies. In part, the amendments require standardized, enhanced disclosure about derivatives in investment company financial statements. The compliance date for the amendments is for periods ending after August 1, 2017. Although management continues to evaluate the potential impact of the amendments on the Fund, it expects such impact will be limited to additional financial statement disclosures, with no effect on the Fund s net assets or results of operations. 23
Householding The Company has adopted a policy that allows it to send only one copy of the Fund s prospectus, proxy material, annual report and semiannual report to certain shareholders residing at the same household. This reduces Fund expenses, which benefits you and other shareholders. If you need additional copies or do not want your mailings to be householded, please call Lord Abbett at 888-522-2388 or send a written request with your name, the name of your fund or funds and your account number or numbers to Lord Abbett Family of Funds, P.O. Box 219336, Kansas City, MO 64121. Proxy Voting Policies, Procedures and Records A description of the policies and procedures that Lord Abbett uses to vote proxies related to the Fund s portfolio securities, and information on how Lord Abbett voted the Fund s proxies during the 12-month period ended June 30 are available without charge, upon request, (i) by calling 888-522-2388; (ii) on Lord Abbett s Website at www.lordabbett.com; and (iii) on the Securities and Exchange Commission s ( SEC ) Website at www.sec.gov. Shareholder Reports and Quarterly Portfolio Disclosure The Fund is required to file its complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Form N- Q. Copies of the filings are available without charge, upon request on the SEC s Website at www.sec.gov and may be available by calling Lord Abbett at 888-522-2388. You can also obtain copies of Form N- Q by visiting the SEC s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330). 24
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We Recycle This document is printed on recycled paper. Go Paperless! Visit www.lordabbett.com to learn how to receive all your shareholder communications online. This report, when not used for the general information of shareholders of the Fund, is to be distributed only if preceded or accompanied by a current fund prospectus. Lord Abbett mutual fund shares are distributed by LORD ABBETT DISTRIBUTOR LLC. Lord Abbett Series Fund, Inc. International Core Equity Portfolio SFICE-3 (08/17)